If you prove that you were the victim of intentional discrimination or retaliation and you prove that you lost wages and/or benefits and you show an emotional injury, you might get punitive damages. Traditionally, punitive damages are awarded to punish an employer for discriminating or retaliating against a worker and to deter that employer and others from engaging in illegal acts in the future. Typically, the successful employee must show that the employer acted with malice or reckless indifference. Federal courts acting under federal laws limit the amount of emotional and punitive damages that discrimination victims can recover under the federal laws to $50,000 to $300,000, depending on the size of the employer. Some state laws do not impose this type of cap on damages.
In cases concerning reasonable accommodation under the Americans with Disabilities Act, compensatory or punitive damages may not be awarded to the successful plaintiff if an employer can demonstrate that it exercised "good faith" in attempting to provide the reasonable accommodation.
Tennessee state law does not permit for the recovery of punitive damages for discrimination cases. However, retaliation cases permit for the recovery of punitive damages without the imposition of a cap.
Typically, if a case is settled, the employer is simply willing to pay a certain amount of money for the settlement. They do not typically break it down as compensatory, punitive or any other category of damages. Special tax rules may apply to the recovery of compensatory damages. You need to consult with a tax attorney or accountant to determine how these rules apply. I am not a tax attorney and do not provide any tax advice.
